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Buy-Write Is the Right Buy
By STEVEN M. SEARS | MORE ARTICLES BY AUTHOR

The simple strategy known as the "buy-write" or "covered call" was proven in 2011 to make a silk purse from a sow's ear

http://online.barrons.com/article/SB50001424052748703805304577124633341696956.html?mod=BOL_hps_dc

In part:

"ENDEAVOR IN 2012, AND ONWARD, to buy fear, and sell confidence. You don't have to be a trader to do that. When the market sinks, stay cool. Sell out-of-the-money puts against quality stocks you own, or would like to own. When the market surges higher, sell calls.

Michael Schwartz, Oppenheimer & Co.'s chief options strategist, says investors must learn to make a friend of volatility. If volatility isn't your friend, he says, volatility can be a fierce enemy.

He spent much of the year telling clients that "buy-write often beats buy-and-hold," and now he is telling them that "put-write often beats buy-and-hold."

The CBOE's Website includes many studies that provide multiyear proof of the salubrious effect of selling options against stocks. "Investors must learn to let volatility work for them, not against them," Schwartz says."